Construction, Forestry, Maritime, Mining and Energy Union

[2021] FWC 1924

[2021] FWC 1924

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

Construction, Forestry, Maritime, Mining and Energy Union
(B2021/120)

COMMISSIONER WILLIAMS PERTH, 5 MAY 2021

Application for a majority support determination - SRG Global Industrial Services Pty Ltd.

[1] On 25 February 2021, the Construction, Forestry, Maritime, Mining and Energy Union (the Applicant or the CFMMEU) applied under section 236 of the Fair Work Act 2009 (Cth) (the Act) for a majority support determination in respect of a proposed single enterprise agreement (the Application).

[2] The Applicant seeks a determination that a majority of employees employed by SRG Global Industrial Services Pty Ltd (SRG Industrial or the Respondent) at its yard in Wangara (the Wangara Yard or the Yard) wish to bargain for an agreement.

Background facts

[3] In August 2018, the Federal Court approved a Scheme of Arrangement that involves SRG Limited and Global Construction Services Limited (GCS) merging to create SRG Global Limited. This merger resulted in two relevant entities for this matter:

•  SRG Industrial, being a former GCS entity; and

•  SRG Global Integrated Services Pty Ltd, being a former GCS entity (SRG Integrated).

[4] The merged group envisaged that SRG Integrated would eventually replace SRG Industrial and that SRG Industrial would consequently be wound-up.

[5] At the time of the merger, the GCS Industrial Services Enterprise Agreement 2013 (the 2013 Agreement) was in operation, which applied to SRG Industrial and its existing workforce.

[6] It was decided that the businesses corporate structure would be streamlined and that the administrative double up would be minimised.

[7] As part of this strategy, on 5 April 2019, the GCS Integrated Services Maintenance and Services Enterprise Agreement 2018 (the 2018 Agreement) was approved by the Fair Work Commission (the Commission). It came into operation on 12 April 2019.

[8] Effective 12 April 2019, following the approval of the 2018 Agreement, SRG Industrial ceased employing any new employees covered by the 2013 Agreement. SRG Industrial has not, from this date, employed any new blue collar employees at the Yard, nor does it intend on doing so.

[9] As a result, SRG Industrial has not engaged any new blue collar employees to work at the Wangara Yard since April 2019.

[10] The 2018 Agreement has superior terms and conditions compared to the 2013 Agreement.

[11] From November 2018, SRG Industrial commenced the implementation of its corporate restructure strategy and began the process of simplifying the structure and internal systems and processes, including unifying accounting, payroll systems and leave requests, by transferring the employees covered by the 2013 Agreement to other employing entities.

[12] This process has been delayed by a number of factors, including COVID-19.

[13] On 19 February 2021, SRG Industrial (in conjunction with SRG Integrated) commenced a period of consultation with its workforce (including the Wangara Yard employees) concerning transferring employment over to SRG Integrated by June 2021 (this date being the date set as it is relevant for tax and corporate reporting reasons).

[14] SRG Integrated commenced issuing new contracts to SRG Industrial’s Wangara Yard employees on 3 March 2021 for review and comment. There have been 17 employees from the Wangara Yard whose employment have now been transferred to SRG Integrated by accepting the offers of employment.

[15] As a result of the increasing number of transferred employees and as part of its corporate restructure strategy, on 9 March 2021, SRG Integrated made an application for orders pursuant to Part 2-8 of the Act in respect of the transferring SRG Industrial employees, to ensure that the 2018 Agreement applies to the transferring SRG Industrial employees, to the exclusion of the 2013 Agreement.

[16] SRG Industrial has not agreed to, nor has it initiated bargaining for an enterprise agreement to cover its workforce at the Wangara Yard 1.

The Legislation

[17] Section 237 of the Act prescribes when the Commission must make a majority support determination and is set out below:

“237 When the FWC must make a majority support determination

Majority support determination

(1) The FWC must make a majority support determination in relation to a proposed single enterprise agreement if:

(a) an application for the determination has been made; and

(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(2) The FWC must be satisfied that:

(a) a majority of the employees:

(i) who are employed by the employer or employers at a time determined by the FWC; and

(ii) who will be covered by the agreement;

want to bargain; and

(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c) that the group of employees who will be covered by the agreement was fairly chosen; and

(d) it is reasonable in all the circumstances to make the determination.

(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.

(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Operation of determination

(4) The determination comes into operation on the day on which it is made.”

Union coverage

[18] The Respondent objects to the Application on the basis that the Applicant is not entitled to represent Mr David Thorpe’s (Mr Thorpe) industrial interests. Mr Thorpe was the only employee to give evidence in this matter.

[19] Only a bargaining representative of an employee who will be covered by a proposed agreement can make a s236 application. Section 176 of the Act deals with identifying persons who are bargaining representatives and is set out below:

“176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements

Bargaining representatives

(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:

(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;

(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:

(i) the employee is a member of the organisation; and

(ii) in the case where the agreement is a multi‑enterprise agreement in relation to which a low‑paid authorisation is in operation—the organisation applied for the authorisation;

unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or

(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;

(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.

Bargaining representatives for a proposed multi‑enterprise agreement if a low‑paid authorisation is in operation

(2) If:

(a) the proposed enterprise agreement is a multi‑enterprise agreement in relation to which a low‑paid authorisation is in operation; and

(b) an employee organisation applied for the authorisation; and

(c) but for this subsection, the organisation would not be a bargaining representative of an employee who will be covered by the agreement;

the organisation is taken to be a bargaining representative of such an employee unless:

(d) the employee is a member of another employee organisation that also applied for the authorisation; or

(e) the employee has appointed another person under paragraph (1)(c) as his or her bargaining representative for the agreement; or

(f) the employee has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2).

(3) Despite subsections (1) and (2):

(a) an employee organisation; or

(b) an official of an employee organisation (whether acting in that capacity or otherwise);

cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.

Employee may appoint himself or herself

(4) To avoid doubt and despite subsection (3), an employee who will be covered by the agreement may appoint, under paragraph (1)(c), himself or herself as his or her bargaining representative for the agreement.

Note: Section 228 sets out the good faith bargaining requirements. Applications may be made for bargaining orders that require bargaining representatives to meet the good faith bargaining requirements (see section 229).”

[20] Both parties have filed comprehensive submissions regarding this question and the CFMMEU’s eligibility rules.

[21] Firstly, it is necessary to review the evidence regarding Mr Thorpe’s work.

[22] Mr Thorpe is a leading hand yard worker and was the only employee to give evidence.

[23] His evidence 2 was that as a Leading Hand, he still does the work of a yard worker, but also has supervisory responsibilities. These include distributing orders from the office to yard workers, checking orders completed by pickers for accuracy, keeping an eye on the duration of yard workers’ lunch breaks, and generally keeping an eye on part of the Wangara Yard. He drives a forklift every shift for at least five to six hours per shift3.

[24] His evidence was that SRG’s business at the Wangara Yard is to provide scaffolding and related services to the residential and commercial construction industry and the mining industry.

[25] Under cross examination, Mr Thorpe agreed that the Position Description for Yard worker and Leading Hand 4 accurately records the respective duties and responsibilities.

[26] The evidence of Ms Zanazzi 5 was that truck drivers and yard workers are employed at the Yard, but not tradesmen. In some of her past interactions with employees at the Yard, the employees have been represented by the Transport Workers Union (TWU) and she understands that the TWU has coverage of the majority of the employees engaged at the Yard, which would include the yard hands and the truck drivers. She has not had any involvement with the CFMMEU representing employees prior to this matter.

[27] Her evidence was that the Yard does not engage construction employees 6. The Yard forms part of the asset services of the Respondent’s business.

[28] Ms Zanazzi agrees with Mr Thorpe’s description of his daily duties, as contained in his witness statement 7.

[29] Her evidence was that the Yard is a storage facility for scaffolding, portaloos, and portable sheds that are leased out to commercial or residential builders 8.The employees engaged at the Yard do not go to the client’s premises, and only the truck drivers leave the Yard9.

[30] The first part of the eligibility rule which the CFMMEU relies upon is Rule 2(E)(a) which is as follows:

“(E) Without limiting the generality of the foregoing and without being limited thereby the following are eligible to be members of the Union:

(a) An unlimited number of all classes of engine drivers, firemen, crane drivers, mobile crane drivers, forklift drivers, tow motor drivers, excavator drivers, pump attendants, pile drivers, motor drivers or attendants, greasers, cleaners, trimmers and any other workers assisting in and about the work incidental to any engine, boiler or machinery connected with the production or utilisation of power on land or any harbour or river, and boiler attendants attending boilers not generating steam for power purposes and such persons as have been elected or appointed as paid officers of the Union or a branch of the Union or whilst financial members of the Union are elected as representatives of any working-class organisation to which the Union or a branch thereof is affiliated, or as a working-class member of Parliament.

Provided that mobile crane drivers, operators of forklifts and/or tow motors engaged on the waterfront upon such work being that of a waterside worker or engaged in the transport of goods by road, or motor truck drivers wherever employed, shall not be eligible for membership.” (Underlining added)

[31] The Applicant relies on the approach of the High Court in Re Coldham (1984) HCA 62 regarding how this rule is to be construed. In short, it is submitted that this is binding authority on how the rule is to be read and has been applied previously by the Commission. The Applicant submits that this part of its rules has been applied to forklift drivers generally.

[32] Importantly, the exclusion or proviso (which is underlined above), the Applicant says, has no application to Mr Thorpe because he is not an operator of a forklift “engaged in the transport of goods by road”.

[33] The Respondent takes a different approach, submitting that the Respondent’s yard operations fall squarely within the transport and distribution industry.

[34] The Commission was referred to the case of CFMMEU v Qube Logistics [2021] FWC 929 (Qube), wherein Deputy President Gostencnik considered at length this exclusion or proviso.

[35] It was submitted by the Respondent that the Deputy President’s conclusion was that this exclusionary proviso is an entire exclusion, which in this case, renders Mr Thorpe ineligible for membership of the CFMMEU at all.

[36] In the Qube decision, Deputy President Gostencnik ultimately concluded as follows:

“[41] Thus, for the reasons stated, the Operators who are drivers of the reach stackers and container forklifts at the three IMTs are thereby in my view engaged in the transport of goods by road. The proviso in Rule 2(P)(F)(a) is more broadly expressed than the proviso in Rule 2(E)(a), but in the result is, relevantly, to the same effect.”

[37] Relevantly, for the purposes of this case, Deputy President Gostencnik’s consideration of the phrase “transport of goods by road” was as follows:

“[32] Second, the phrase “transport of goods by road” in the proviso is a broad one. To transport means the action of carrying or conveying a thing or person from one place to another. Noting the caution about over reliance of dictionaries in the exercise of construction, “road” is a “way, usually open to the public for the passage of vehicles, persons and animals” or “the track on which vehicles etc pass, as opposed to the pavement”. The transport of goods “by road” involves moving the goods by using a road surface or travelling along a road. Being “engaged in” the transport of goods by road seems to me to involve no more than actively participating in or undertaking duties directly connected with the carrying out of the transport of goods by road.

[33] Third, the Operators are engaged in the transport of goods by road because the work performed by them is part of and directly connected with the road transport business carried on by Qube. The CFMMEU’s reliance of the statement of “Primary Purpose” in the forklift operator’s job description is misplaced. That which is relevant is whether the operator is using the forklift or the reach stacker in a way which causes the Operator to be engaged in the transport of goods by road. The evidence clearly established that that is the case in respect of Operators at the three IMTs. They are engaging in the loading or unloading and in the transportation or repositioning containers for the purposes of the containers (and the goods in them) being transported by road. The Operators are engaged in the transport of goods by road in that they are directly engaged in tasks or duties that are essential to, and part of, the transport of those goods. The Operators perform work by using or operating the relevant vehicles to load or unload trucks and to reposition containers for the purposes of the containers being loaded or unloaded onto and from trucks and to be transported by road.

[34] It is uncontroversial that Qube undertakes a road transport and distribution business. The function of the Operators who operate reach stackers and container forklifts are to unload, consolidate and load containers on and off trucks and trains, which undertaking is for the purposes of, and as part of, the goods transported by road for Qube’s clients. Without the function being carried out by the Operators, the physical transport of goods by road cannot happen. This analysis focuses on the work performed by the Operators and whether that work has the result that the Operators are “engaged in the transport of good by road”. It does not rely for its efficacy on a consideration of the industry in which Qube operates its business but plainly Qube’s business is relevant in understanding the functions undertaken by the Operators, the whole of which are directed at, and a necessary or essential part of, the transport of goods by road”. (footnotes removed)

[38] In this case, it is important for the Commission to decide whether Mr Thorpe, who is a leading hand yard worker who operates a forklift, is “engaged in the transport of goods by road”. If he is, then he falls within the exclusionary proviso and is not eligible to be a member of the Applicant, and so, this application must fail.

[39] In this case, the evidence is that the Respondent is leasing scaffolding, portaloos, and sheds to clients. The work in the yard involves preparing orders for scaffolding, portaloos, and sheds and then loading these onto trucks for delivery and also unloading trucks with returned equipment.

[40] Those trucks are obviously transporting the leased equipment by road.

[41] In Mr Thorpe’s case, he does engage in loading or unloading those trucks. These duties are essential for the transport of the leased equipment.

[42] The Macquarie Concise Dictionary (Fourth Edition) defines “goods” as follows,

“good… 28. (plr) articles of trade; wares; merchandise, especially that which is transported by land.”

[43] The leased equipment, being scaffolding, portaloos, and sheds, are wares or merchandise which are transported by land and are therefore, by definition, “goods”.

[44] Consequently, in my view, Mr Thorpe is an operator of a forklift engaged in the transport of goods by road.

[45] Mr Thorpe therefore falls within the exclusionary proviso of Rule 2(E)(a) and is not eligible to be a member of the Applicant.

[46] With respect to the Applicant’s submission that Mr Thorpe is in any case eligible to be a member by virtue of Rule 2(Q)(5), which concerns additional eligibility for Western Australia, I am not persuaded that the Applicant’s submissions on this point are correct.

[47] Even if Mr Thorpe is an engine driver, which I do not accept, this ignores the second paragraph of Rule 2(Q) which states the provisions of Rule 2(Q) do not extend and are not intended to operate as extending the eligibility rules of the Union beyond those of the Construction, Forestry, Mining and Energy Union of Workers and this provison applies regardless of any term or other provision of Rule 2(Q). Therefore, it is my view that Rule 2(Q) cannot operate, as the Applicant submits it does 10, to overcome the exclusionary proviso of Rule 2(E).

[48] I am not satisfied that Mr Thorpe is eligible to be a member by virtue of Rule 2(Q)(5).

[49] Having concluded that Mr Thorpe is not eligible to be enrolled as a member of the Applicant, it is my decision that this application must be dismissed.

[50] Should I be wrong on this point, I have, for completeness, below dealt with the other contentious points in the Application.

Point in time

[51] In the matter of Kantfield Pty Ltd T/A Martogg & Company v The Australian Workers’ Union, a Full Bench of the Commission held that in deciding a majority support determination, the Commission’s power to apply a point-in-time limitation is only directed to fixing the time at which it determines who the persons employed are and that the decision as to whether a majority of employees want to bargain is to be made on the basis of the most current material available at the time of the decision 11.

[52] Applying that approach to this case, it is the date of hearing which is the time the Commission will determine who the persons employed are and whether a majority of those employees wish to bargain.

Majority

[53] Based on the Notices to Initiate Bargaining signed by employees and filed by the Applicant (each dated 12 February 2021) and the most recent information as of 29 March 2021 as to who are the employees employed by the Respondent in the Wangara Yard 12, I am satisfied that a majority of the employees who were employed by the Respondent at the date of the hearing and who will be covered by the agreement do want to bargain for an agreement.

Not agreed to bargain

[54] It is not disputed that the Respondent, who would be covered by the agreement has not yet agreed to bargain nor initiated bargaining for an agreement.

Fairly Chosen

[55] The circumstances as at the date of hearing is that the employees who wish to bargain with the Respondent, who are employed at the Wangara Yard, are a geographically, organisationally, and operationally distinct part of the Respondent’s workforce, as was conceded by the Respondent 13.

[56] I am satisfied that the group of employees who will be covered by the agreement was fairly chosen.

Reasonableness

[57] The Respondent submits that the Commission should conclude that it is not reasonable in all of the circumstances to make the determination.

[58] The Respondent submits that the evidence of Ms Zanazzi, which is uncontested, is that the Respondent is expected to be wound up by 30 June 2021 14.

[59] This outcome, if it occurs, will be the result of a lengthy corporate restructuring plan, which has been in place for a number of years.

[60] The Respondent submits that bargaining for an agreement would be resource-intensive and potentially moot. It is unlikely that an agreement would be negotiated successfully and approved by the Commission prior to the expected winding up.

[61] The Respondent has also offered all employees alternative employment with another entity on improved terms and conditions of employment.

[62] My view of all of the Respondent’s concerns, which are quite legitimate from their perspective, is that they are not matters which make it unreasonable for the Commission to make the determination sought.

[63] Whilst it obviously does not suit the Respondent’s interests for me to make a determination, section 237 of the Act is a beneficial provision in the legislation in the sense that it provides a mechanism for employees to encourage their employer, who has previously been unwilling to commence negotiations, to do so. If negotiations don’t occur after a majority support determination has been issued, employees have further rights in terms of pursuing other remedies under the Act regarding good faith bargaining.

[64] The employees are entitled to hold a view of their future employment arrangements that is different from their employer’s view. There is no reason why their employer’s view should prevail in an application such as this.

[65] In my view, it is reasonable in all of the circumstances to make the determination.

Conclusion

[66] As explained earlier in this decision, I have decided that Mr Thorpe is not eligible to be a member of the Applicant. Consequently, the Applicant was not entitled to make this application and, notwithstanding my decision regarding the other matters, for that reason, this application must now be dismissed.

[67] An order [PR728480] to that extent will now be issued.

Appearances:

D Rafferty of Eureka Lawyers for the Applicant.
S Rogers of Mills Oakley for the Respondent.

Hearing details:

2020.
Perth:
April 1.

Printed by authority of the Commonwealth Government Printer

<PR728479>

 1   Exhibit R1, Witness Statement of Ms Zanazzi dated 29 March 2021 at paras 6-19.

 2   Exhibit A4, Witness Statement of Mr Thorpe dated 22 March 2021 at para 11 and para 12.

 3   Transcript at PN274-279.

 4   Exhibit R1, Annexures AZ-A and AZ-B.

 5   Exhibit R1 at para 32, para 69, para 74, and para 75.

 6   Transcript at PN539.

 7   Exhibit R1 at para 20.

 8   Transcript at PN499 and PN537.

 9   Ibid., at PN500-501.

 10   Applicant’s submission in reply dated 15 April 2021 at para 2.

 11   [2016] FWCFB 8372 at paras 35-38.

 12   Exhibit R1 at para 35.

 13   Respondent’s outline of submissions dated 29 March 2021 at para 64.

 14   Exhibit R1 at para 46 and para49.